The Taxonomist:

People often talk about how the federal income tax should not push people deeper into poverty. One way to measure how well the system performs in this regard is to look at how much a person or family can earn before income taxes kick in.

Current law's combination of standard deductions, personal exemptions, and credits yields some fairly odd results. This year, for a single person without children, the income tax threshold is $8,275; in other words, a person in this category will not pay income tax on the first $8,275 of wage earnings. For married people without children, the threshold is $12,950, or $6,475 per person--a marriage penalty.

When children enter the picture, things get even stranger. If a single person has a child, the tax threshold jumps by about $13,300. If a couple has a child, the threshold rises by only $10,400. (For additional children, the changes in the tax threshold are more similar among couples and single parents, about $5,400 for a second child and about $2,600 for a third.)

When you put all this together, you find that the tax threshold for a single parent with one child is $21,590, compared to only $12,950 for a childless married couple. If our goal is to exempt a subsistence level of earnings from income tax, then these figures seem to imply, among other things, that we think a first child needs about 60 percent more to live on than a second adult. Maybe we should ask ourselves why we think that.

Department of Hollow Gestures

The Virginia assembly recently took up a proposal to give parents subsidies for sending their children to private K-12 schools. The bill's proponents styled their program as tuition tax credits, capped at whichever turns out to be less: $2,500 a year per student or the amount a family otherwise owes in Virginia income tax.

Of course, richer families would get larger credits. So to show their solicitude for lower-income families, the bill's sponsors proposed to waive the $2,500 subsidy cap for families making up to 185 percent of the federal poverty guideline. In theory, then, these families could get a larger tax credit. But the bill's supporters failed to mention one minor point: No such family pays anything close to $2,500 a year in Virginia income tax. In other words, this apparently kind-hearted gesture was meaningless.

In fact, the maximum possible tuition subsidy under the bill for Virginia families making less than $10,000 who have school-age children would be a mere $4 per K-12 child. The maximum tuition subsidy wouldn't be available for two K-12 children until a family's income exceeded $104,000; only families making more than $203,000 could get the full subsidy for four children in private school.

Taking account of current private school enrollment patterns in Virginia, the Institute on Taxation and Economic Policy (ITEP) pegged the cost of the tuition subsidies at $144 million a year. More than three-quarters of that, ITEP found, would go to the 24 percent of Virginia families making more than $75,000 a year.

People For the American Way presented ITEP's finding to the Virginia assembly at hearings held in early February. The facts must have been persuasive. Despite lobbying by school voucher advocates from around the country, the bill has been dropped for this legislative session. &curren